N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 201                                                         27 October 1995

Hungary Will Not Send Armed Soldiers to Bosnia

        Rome, October 26 - Hungary does not wish to send armed soldiers
with any NATO contingent that may be sent to Bosnia. The Hungarian
government has sent a statement to Brussels to notify NATO officials
of this decision and NATO understands Hungary"s position, said
Lieutenant-General Sandor Nemeth, chief of staff of the  Hungarian
Armed Forces, in Rome on Thursday.
        Nemeth, who is on an official visit to Italy, gave an interview
to MTI after his talks with Admiral Guido Venturoni, head of the
Joint Chiefs of Staff of the Italian Armed Forces. A large part of
the talks was devoted to the new NATO contingent which is to be sent
to Bosnia. It is obvious, said Nemeth, that the first requirement is
for a peace agreement to be in place that would enable the contingent
to begin to deploy. It became apparent durin  the talks that, due to
their countries" position, the Italian and Hungarian armed forces
face similar problems, he continued.
        However, as a member of NATO, Italy is in a different
situation: Rome has already announced its readiness to send armed
troops to Bosnia. "However, our history is so much entwined with that
of the region that it would not be suitable for us to follow the
Italian example. I believe NATO understands the Hungarian position,"
Nemeth stressed. It is more important for NATO that the Hungarian
government has agreed in principle to the use of Hungarian territory
for the deployment of NATO troops in Bosnia and is ready to provide
some logistical support. "Obviously, such an assurance is of great
importance to NATO. In addition, we are ready to send troops who are
unarmed, such as medical and health service groups or units carrying
out logistical tasks," Nemeth explained. The Hungarian armed forces
are also willing to provide facilities where personnel from the peace
implementation force could spend their leave and, if need be, receive
hospital treatment.
        The two military leaders" talks also touched on Hungary"s
possible admission to NATO, but Italy did not make any commitment.
"Yet I have the impression that the Italians are in favour of the
expansion of NATO and would welcome Hungary in its ranks," Nemeth
stated. He said his talks in Rome had confirmed his view that the two
countries" military relations were developing very well. "We are past
the stage of just sending high-level delegations to each other. The
relationship has reached sub-unit levels, especially between the
Italian 5th Army Corps and the 2nd Military District of Kaposvar."
        The Hungarian chief of staff met the American director-general
at the Rome centre of the Multinational Forces and Observers (MFO)
serving in Sinai. In August and September, a 41-member Hungarian
contingent arrived on the peninsula. Director-General Wat T.
Cluverius said the MFO was satisfied with the Hungarian soldiers, who
had adapted well to the local conditions and were carrying out their
tasks very efficiently.

Hungarian President in Washington

        Washington, October 26 - Hungarian-Romanian relations, NATO
expansion and the crisis in former Yugoslavia were the main subjects
of talks between Hungarian President Arpad Goncz and U.S. House of
Representatives Foreign Affairs Committee Chairman Benjamin Gilman in
Washington late on Wednesday. Two committee members - Tom Lantos and
Peter King - also attended the meeting.
        The president"s spokesman, Andras Farago, said that Goncz had
told the U.S. legislators that Hungary, mindful of the interests of
Transylvanian Hungarians, would not like to see the line dividing
East and West coincide with the Romanian-Hungarian border.
        He said he was a strong believer in reconciliation, but
stressed that genuine progress depends on the will of both sides. "We
are ready for further serious talks, but what is most important to us
is to reach an agreement allowing the Hungarian minority to feel at
home and remain Hungarians who are loyal to the Romanian state,"
Goncz said, adding that Hungary had no wish to change the present
borders.
        Discussing the Yugoslav crisis, the president spoke highly of
U.S. diplomatic efforts aimed at resolving the conflict, while
pointing out that Hungary"s capacity to act largely depended on th
situation of Vojvodina Hungarians. He warned that the influx of
Krajina Serb refugees could alter the traditional ethnic proportions
and result in the Hungarians in  Vojvodina being unable to have a say
in decisions affecting their own fate. Goncz believes Hungary"s NATO
membership would increase the stability of Central Europe as a whole,
and that the Partnership for Peace scheme is a good means of catching
up with NATO standards. He  noted that delays in making the political
decision on new admissions might entail undesirable consequences.
        President Arpad Goncz was the guest of honour at the reception
given on Wednesday evening by Hungary"s Ambassador in the U.S. Gyorgy
Banlaki to mark the anniversary of the 1956 Hungarian revolution and
fight for freedom.
        At the ceremony, Goncz handed 1956 memorial plaques to tw
Hungarian-born Americans - Annamaria Csaki and Arpad Szilagyi - in
recognition of their role in the service of the nation 39 years ago.
troops to Bosnia.

Destruction of Tanks - International Quota

        Budapest, October 26 - The last "redundant" tank of the
Hungarian Armed Forces will be destroyed in Godollo, near Budapest,
on Friday. With this, Hungary will fulfil the obligations imposed on
it by the Treaty on the Reduction of Conventional Armed Forces in
Europe three weeks before the deadline.
        The document regulates the number of tanks, armoured vehicles,
over-100-mm artillery equipment, fighters, and special combat
helicopters. Earlier the Hungarian Armed Forces had many more tanks
and artillery devices than permitted by the treaty, but the number of
armoured vehicles exceeded the limit set for November 16 by only a
few. Of combat helicopters and fighters, the armed forces have always
had fewer than allowed. The international agreement allows Hungary to
have 835 tanks, 1,700 armoured vehicles, 1047 artillery pieces, 180
fighter planes, and 108 combat helicopters.

Cabinet Session - Press Briefing

        Budapest, October 26 - "Although interest coordination talks
are not yet over, the cabinet has decided it will submit its proposal
on the 1996 personal income tax system to Parliament on Friday, as if
MPs do not receive the bill in time, that could   endanger the
punctual approval of the 1996 budget bill," administrative State
Secretary of the Prime Minister"s Office, Elemer Kiss, told reporters
on Thursday.
        The State Secretary also said the bill is not the amendment of
the currently valid law. The Ministry of Finance has worked out a
draft of a new structure. The cabinet plans several essential
changes. For instance, the draft includes two tax proposals. Under
the first tax proposal, a 20 per cent income tax will have to be paid
on incomes up to HUF 150,000, 25 per cent for incomes over this and
up to HUF 220,000, 35 per cent up to 380,000, and 40 per cent up to
550,000. Tax on incomes over HUF 550,000 per year will continue to be
44 per cent.
        The cabinet wishes to compensate wage and salary earners for
the elimination of the zero tax bracket, which is why the bill
features a second proposed scale of brackets. Based on this, wage
earners with annual income less than HUF 960,000 would fall in the
zero tax bracket up to annual incomes of HUF 200,000, 27 per cent tax
between 200,000 and 300,000, 35 per cent over this and up to 600,000,
and 60 per cent for the HUF 600,000 to 960,000 bracket. This proposal
would mainly favour those with lower incomes.
        The State Secretary added the cabinet had reviewed the law-
making schedule submitted to Parliament. Based on this, it has
proposed to the House Committee that it is absolutely vital for
Parliament to approve the 1996 budget and related laws, this year, on
top of politically important laws like the media law and the national
security law.
        Imre Verebelyi, the government commissioner responsible for
public administration in the Prime Minister"s Office, said he had
given a report to the cabinet on the working of regional state
administration bodies, adding proposals for necessary reforms. The
report stated that regional state administration organs are overly
divided up in structure. There are more than 600 regional government
offices in the 20 counties, with 41,000 public employees. Their work
is uncoordinated, and official functions are not clearly separated.
Regional administration is inefficient and expensive. Accepting the
proposals of the government commissioner, the cabinet ordered a re-
examination of regional state administration, saying official and
service functions should be separated. Unnecessary tasks should be
eliminated or redirected.

Restrictive Economic Policy to Continue Next Year

        Budapest, October 26 - In order to decrease the budget deficit,
the Hungarian government will continue its restrictive economic
policy next year. The austerity measures will affect private and
public consumption, as well as wages. The government plans to modify
the taxation system and the level of social insurance contributions,
said Laszlo Akar, state secretary at the Ministry of Finance, at the
Hungarian Industrial Alliance"s Thursday session.
        According to Akar, this year the budget deficit is 6.5 per cent
of GDP, and the government"s target is to cut it to 4 per cent or
below in 1996. To this end, real wages will fall by 4 per cent, after
an 11-pct drop this year. Next year, 40 per cent more funds will be
allocated for state investments and the Fund for Economic Development
will have more resources than this year as well.

        World Bank President to Visit Budapest

        Budapest, October 26 - World Bank President James D. Wolfensohn
comes to Budapest for an official visit on Friday. He is scheduled to
meet Hungarian President Arpad Goncz, Prime Minister Gyula Horn, and
will continue his dialogue opened in Washington with Minister of
Finance Lajos Bokros and National Bank of Hungary President Gyorgy
Suranyi, the Hungarian Regional Representation of the World Bank told
MTI on Thursday.
        Since it became a member in 1982, Hungary has received World
Bank loans valued at more than USD 3.5 billion in the course of 40
transactions, with USD 2.7 billion already used. Talks are now in
progress about several new World Bank projects, and two important
restructuring loans, with a total value of USD 400-500 million, are
also in preparation. One of these would develop the corporate and
financial institution sector, the other to implement the state budget
reform package.
        The International Finance Corporation (IFC), a World Bank
institution covering private investment, has so far approved loans
and capital investment worth nearly USD 390 million for Hungary.

Hungary to Close Cultural Institutes Abroad

        Budapest, October 26 - In view of next year"s austerity
measures, the Hungarian Ministry of Culture and Education plans to
close its cultural institutes in Sofia, Cairo and New Delhi, and
leave only a cultural counsellor working at the Hungarian embassies
there.
        Briefing MTI"s correspondent after Wednesday"s ministerial
conference, a ministry official said that in other countries, where
it is possible, cultural institutes would be moved to a joint
building with foreign or trade missions. Several institutes,
including the Hungarian Academy of Rome and the Hungarian Cultural
Institute of Paris, will not be affected by such constraints.
        The government will decide on the future of cultural institutes
after the ministry has coordinated its plans with the Foreign and the
Industry and Trade ministries.

N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 202                                                         30 October 1995

Economic Analysis by Central Statistical Office

        Budapest, October 27 - Between January and August 1995,
industrial output continued to increase, though at a slower pace than
last year. There was a significant change in the amount of products
manufactured for export, while at the same time, there was a major
improvement in agriculture. State purchase prices for agricultural
products increased, enabling farmers to gain more profit. The
internal and external financial balances began to improve, the
Central Statistical Office informed MTI.
        In the first eight months of the year, industrial production
was 7.4 per cent higher than in the corresponding period of last
year, mainly thanks to exports.
        Domestic sales rose only by 1.4 per cent in these eight months.
        Due to staff cuts, the productivity of industry improved by
12.4 per cent.
        The state purchase prices of agricultural products rose by 13
per cent in one year. Of cereals, the largest amount bought was wheat
- 37 per cent more than last year.
        Though at a decelarating pace, the foreign trade balance
continued to deteriorate: in the first eight months the deficit
amounted to USD 2,467 million, only 80 million less than last year.
        The volume of export rose by 4 per cent and import was 3 per
cent less than in the previous year.
        At the end of September, the budget deficit amounted to HUF 216
billion - HUF 60 billion more than targeted for the whole of the
year.
        From January to August, the monthly wage of full-time workers
was HUF 37,924 on average, 20.7 per cent more than last year. Net
earnings were HUF 25,340 per month on average, 15.6 per cent up on
last year.
        Not real wages (with consumption prices taken into account)
decreased by an average of 9.7 per cent.

Finance Minister Speaks in Frankfurt

        Frankfurt, October 27 - "Privatisation was the most important
form of corporate restructuring here - in this Hungary is more
successful than the Czech Republic and Poland, although it has more
serious problems handling national economic trends than those two
countries," Hungarian Minister of Finance Lajos Bokros on Friday told
a forum for bankers in Frankfurt. "Hungary has successfully enticed
significant amounts of foreign means into the country. The value of
foreign investment totals USD 10 billion, and the number of joint
ventures set up with foreign participation is more than 20,000," he
said.
        "More than one-third of Hungarian exports today originate from
companies set up in the last few years," Bokros added.
        Discussing the current government, the minister said Hungary's
economy was earlier characterised either by growth or balanced
finances, but never by the two together at the same time.

        OSCE Senior Council Session in Prague

        Prague, October 27 - Ways to better coordinate the work of the
Organisation for Security and Cooperation in Europe (OSCE) and the
Council of Europe in former Yugoslavia, and reviewing fulfilment of
obligations accepted by member states were the main topics in
discussions between Hungarian Foreign Minister Laszlo Kovacs,
Chairman-in-Office of the OSCE, and Czech Foreign Minister Josef
Zieleniec, Chairman-in-Office of the Committee of Ministers of the
Council of Europe. Also at the talks were OSCE Secretary-General
Wilhelm Hoynck and the Secretary-General of the Council of Europe,
Daniel Tarschys.
        As regards Bosnian elections, Kovacs said the settlement of
ethnic problems is one of the key issues to resolving the Yugoslav
crisis. They all agreed that forcible alteration of ethnic ratios in
different districts is unacceptable, and all minorities should be
ually during the settlement process.
        The Hungarian foreign minister "In an informal meeting with the
Council of Europe leaders, we also exchanged views on the Slovak
language law, and agreed to continue to stay in touch and follow
events," Kovacs explained.
        "This no longer is a Slovak issue only, as Bratislava accepted
certain obligations when it became a member of the Council of Europe,
and these have to be fulfilled. Their new language law clashes with
the Council of Europe's norms, and with the Hungarian-Slovak basic
treaty which has been incorporated into the European stability
agreement, at several points.
        "The Hungarian-Slovak document was well received in
international forums, and if Bratislava now passes a language law
that contradicts it, it follows that it is no longer an issue of the
two states only," Hungarian Foreign Minister Laszlo Kovacs said.

Hungarian Minister's Talks with Johannes Rau

Budapest, October 27 - "North Rhine-Westphalia state (Germany) may
add to the DM 1 billion credit framework Hungarian Prime Minister
Horn and German Chancellor Kohl signed in early October," Minister-
President of North Rhine-Westphalia, Johannes Rau, said in Budapest
on Friday after meeting Hungarian Minister of Transport, Telecom, and
Water, Karoly Lotz, in Budapest.
        Johannes Rau recalled that the German government wishes to
grant the loan to develop the Hungarian economy. Of this, the federal
German government would put in DM 500 million, with the states of
Bavaria and Baden-Wurttemberg each providing DM 250 million.
        The Minister-President came to Budapest with Minister of
Economics and Transport of North Rhine-Westphalia, Wolfgang Clement,
and representatives of several major companies. Their aim was to
learn about the state of Hungarian energy, transport, and
telecommunications, and opportunities to invest in Hungary.
        Hungarian Minister Lotz said infrastructure is economically
crucial. The Ministry needs funds from the German credit scheme for
eight projects, including a Hungarian-Slovenian railway line, a
larger M0 motorway round Budapest, and rail electrification.

Major Urges Close Cooperation in Central Europe

        Budapest, October 28 (MTI) - "Britain will make every possible
effort to take advantage of the new opportunities offered by the
changes, and seeks to establish new-type relations with Hungary, to
the benefit of both countries," British Prime Minister John Major
said in the Saturday issue of "Magyar Hirlap".
        Major was interviewed on the occasion of Hungarian Prime
Minister Gyula Horn's forthcoming official working visit to Britain
on October 31 and November 1.
        In Major's view, Hungary is among the countries which have made
the biggest political and economic strides towards joining the
European Union. "Hungary's achievements are well-known. For this
reason, I don't think that politicians are divided over the
significance of Eastern Europe and Hungary's key role in the region,"
the prime minister said.
        Major spoke about the necessity of cooperation between the
Central European countries. "The Visegrad Four (Czech Republic,
Hungary, Poland, Slovakia), choose the most efficient form of
cooperation alon. At the same time, the successful operation and
enlargement of the Central European Free Trade Agreement (CEFTA)
would carry an efficient political message to the European Union, the
message that the Visegrad Four are able to cooperate even before
being admitted to the EU. Close bilateral cooperation between the
Visegrad countries and other East and Central European countries is
another important element of preparations for accession, indicating
that these countries make a constructive approach to such issues as
minority rights even before becoming EU members," the British prime
minister said.

World Bank President in Budapest - News Conference

        Budapest, October 28 - Should the Hungarian government want to
give an impetus to the privatization of companies and banks and the
reform of public finances, the World Bank is prepared to promote this
process with big loans, James Wolfensohn, President of the World
Bank, told a news conference in Budapest today.
        Earlier, Wolfensohn held talks with President Arpad Goncz,
Prime Minister Gyula Horn, Finance Minister Lajos Bokros, and
National Bank of Hungary President Gyorgy Suranyi.
        "As for the tasks, the Hungarian leaders and the World Bank
have adopted almost identical views," Wolfensohn said, adding that
the stabilization measures taken by the Hungarian government since
March made a very good impression on him.
        Wolfensohn assured the Hungarian politicians that the World
Bank would invariably create the conditions of support for Hungary, a
country in a difficult position. "The World Bank and the
International Finance Corporation will continue to maintain
cooperation with Hungary," he said. Wolfensohn expressed the
preparedness of the World Bank to support privatization in Hungary
but did not disclose what form of cooperation he meant by that.
        Although the two loans on which Hungary and the World Bank have
been holding talks for long were not discussed today, Wolfensohn said
they would not depend on Hungary's reaching an agreement with the
International Monetary Fund.
        In reply to questions, Wolfensohn said his negotiating partners
had made a very good impression on him. "The March programme proves
that Hungary's financial leaders are aware of the situation and the
possible tasks. Restriction sharpens tensions everywhere in the
world. This is what happened in Hungary, too. Without the restrictive
measures, however, the situation could have become even worse. For
instance, since Mexico lost its creditworthiness, the rate of
unemployment has increased to 40 per cent, and inflation has broken
loose," the World Bank president said.
        "Hungary has piled up huge debts. Putting an end to
overspending is a priority. From this aspect, the March measures were
mor created in parallel with the restoration of balance. In this
field, the World Bank will give Hungary the assistance it needs,
"Wolfensohn said.

Border Guards Replaced in Southern Hungary

        Budapest, October 29 - The Hungarian border guards serving
along the country's southern border with Eastern Slavonia were
replaced by fresh forces today, Col. Attila Krizsan, Hungarian Border
Guards Spokesman, told MTI.
        The spokesman quoted the national commander of the Border
Guards as saying that the units serving in the Siklos district had
performed their tasks excellently. They have now been withdrawn and
replaced by fresh forces so that they should have a rest. Under the
decision, the Nyirbator and Budapest border guard units are returning
to their garrison, and being replaced by border guards from Gyor and
Szombathely. The two companies of the Pecs border guards directorate
will remain in their garrison.
        The Baranya border region was reinforced by eight border guard
companies two months ago as tension was sharpening on the other side
of the border. In early October, after the Croatian and Serbian
forces started talks on the future of Eastern Slavonia, the strength
of the border guards serving in the region was reduced by half,
Krizsan recalled.
        The spokesman said that the maneouvres taking place on
Hungarian territory were connected exclusively with the replacement
of troops. The border guards stationed in the region will continue to
give reinforced service and, if required, their number may be
increased within a few hours.

Horn Meets Primakov

        Budapest, October 28 (MTI) - Hungarian Prime Minister Gyula
Horn met Academician Yevgeni Primakov, Director of the Intelligence
Service of the Russian Federation, in Budapest today, the National
Security Office told MTI today.
        Primakov exchanged views with Istvan Nikolits, Hungarian
minister responsible for the civilian security services, and chief
directors Kalman Kocsis of the Information Office and Tibor Vidus of
the National Information Office.

Kosice Explosion - Measuring Stations Wound Up

        Budapest, October 29 (MTI) - The air pollution measuring
stations set up in northeast Hungary after the Friday explosion in
the Kosice iron works were wound up by the Hungarian civil defence
authorities at Sunday noon, a Hungarian Interior Ministry official
told MTI.
        The Slovak authorities will continue to measure air purity and
the two countries' experts will remain in touch with one another, he
said.
        Since the explosion, the civil defence has not registered any
hazardous material in Hungary's air space, the official said.

 Hungarian Police Break Drug Ring

        Budapest, October 27- After almost two years of investigations,
a Nigerian-led gang of drug traffickers has been tracked down in
Hungary, the National Police Command announced at a press conference
on Friday. The group has smuggled some 300 kgs of cocaine and 100 kgs
of heroin to Western Europe.
        The Nigerians hired Hungarian citizens for the transport of the
drugs. They had to travel to Bangkok, Rio de Janeiro and Caracas to
send parcels to addresses in Britain, Italy and Austria. The transit
stop was sometimes Budapest and other times Moscow, Madrid, Paris or
Amsterdam. During the investigations, the Hungarian police closely
cooperated with police forces in other countries and the U.S. Drug
Control Office.
        Between March 1994 and September 1995, three Nigerians, one
Tanzanian, and ten Hungarian citizens were taken into custody in
Hungary, Spain, Britain and France, and altogether 24.5 kgs of
cocaine and 250 grams of heroin were seized.
        The head of the Nigerian gang, O. Emanuel, was taken into
custody in Budapest on September 28. Based on estimates, the group
made USD 15 million from this activity, the bulk of which has been
placed in Western European banks. An investigation is being conducted
to discover which ones.

N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 203                                                 31. October 1995

Prime Minister Meets Spanish Ambassador

         Budapest, October 30. - Hungarian Prime Minister Gyula Horn on
Monday met Spanish Ambassador to Budapest Pablo Benavides, who
brought Horn a letter from Spanish Prime Minister Felipe Gonzales,
chairman-in-office (CIO) of the European Union (EU).
        The Prime Ministerial Press Office explained that in this
letter the Spanish prime minister responds to a Hungarian memorandum
in connection with the EU. Gonzales confirms that the Spanish
government wants to advance the union's relationship with its
associate member states, which may join the EU in the near future.
The CIO supports the Hungarian government's efforts to increase
efficiency in the Association Committee and the Joint Association
Committee, and institutions linked to the European Agreement.
        Gonzales welcomes Hungary's offer to help draw up a farm
strategy as part of preparations for expanding the EU. Spain wants
more cooperation between the ministries of justice and interior, and
backs the use of Phare aid for this.
        The Spanish prime minister's letter underlines the significance
of Hungary's basic treaty with Slovakia, as well as the importance
for signing a similar document with Romania.

Parliament: Slovak Language Law

        Budapest, October 30. - The Slovak language law was attacked by
Zsolt Nemeth, of the opposition Federation of Young Democrats -
Hungarian Civic Party, in Parliament. Nemeth said the Slovak law was
an outrage fatal for the Hungarian minority of Slovakia. Over the
past one and a half years, the Hungarian government has been
assisting Slovak Prime Minister Vladimir Meciar carry through
damaging policies, claimed Nemeth. The opposition MP asked the
cabinet to change its earlier minority policy.
        State Secretary of Foreign Affairs Istvan Szent-Ivanyi
responded: The government is fully aware of the gravity of the
problem and will do all it can to stop the language law from coming
into force.                                             Tamas Isepy, of the
Christian Democratic People's Party, called recent developments
blood-chilling, and Jozsef Torgyan, Independent Smallholders' Party
chairman, said his party had warned the Hungarian-Slovak basic treaty
signed in March would lead to this.
        Ivan Peto, chairman of junior government coalition partner the
Alliance of Free Democrats, said there was no point pretending there
was dissent between parliamentary parties over something where they
actually agree for a change - implying that his party had similar
views on the Slovak language law to those of the opposition.

Swedish Fighter Introduced at Kecskemet

        Kecskemet, October 30. - The Swedish aircraft manufacturer SAAB
introduced its JAS-39 Gripen fighter model at the airfield of
Kecskemet (East Central Hungary) on Monday.
        At a press conference preceding the air and land show,
Lieutenant-General Kent Holger Harrskog, commander of the Swedish air
force, said SAAB had brought one of their latest models to Hungary
knowing that it wants to modernise its air fleet.
        Brigadier-General Istvan Bako, deputy air and anti-aircraft
main division head at the Hungarian Armed Forces, said almost
simultaneously with the Kecskemet programme, at another airfield,
Hungarian air force experts are learning about U.S. F-16s. Alongside
SAAB others have made offers as well, including the American firm.
        Making a decision, still to be approved by Parliament, the
government will consider advice and terms of purchase.
        In talks with SAAB, Hungary's government bound itself to answer
next year whether or not to order the model shown at Kecskemet.

F-16 Fighters - Experts in Budapest

        Budapest, October 30. - Experts from U.S. makers of F-16
fighter planes and from the U.S. Air Force began a three-day visit to
Hungary on Monday to give detailed information on the operation of F-
16 models, ministry spokesman Colonel Lajos Erdelyi told MTI.
        Hungarian Defence Minister asked U.S. Defence Secretary William
Perry for an offer on F-16s during their meeting last month. The
present visit is the first step in this process.
        Senior officials of the defence department and leaders and
acquainted with the characteristics of older and newer F-16 models.
        The MiG-21 fleet currently used in the Hungarian Armed Forces
need be replaced before the turn of the century, so tenders will have
to be called by Hungarian law.
        However, the armed forces first wants to get detailed
information about products and possible offers from major military
aircraft makers worldwide.

Slow Improvement in Hungarian Agriculture

        Budapest, October 30. - This year's potato and sugar beet
harvests exceeded last year's, while the cereal and fruit crops were
smaller than in 1994. This year's produce suffices to cover domestic
demand and provides enough fodder to prevent a further decrease in
the animal stock. On preliminary estimates, agricultural exports may
reach USD 2.5-2.6 billion this year, USD 300-400 million more than
last year.
        In the past six years, Hungary's agricultural production has
dropped by one-third, and its animal stock by even more. Over this
period the state has levied agricultural taxes amounting to HUF 200-
250 billion (approx. USD 1.5-1.9 billion) at current prices. The
purchase value of annual investments has fallen to one-third,
although the HUF 25.8 billion invested in 1990 was already
insufficient to maintain technical development in agriculture.
        A general economic recession and one of the most radical
changes of land ownership in Hungarian history are regarded as main
causes of decline in production. To date, over half of the arable
land has passed to private farmers. Food procession and trade have
been privatized. In 1995, 60 per cent of food export transactions
have been carried out by private traders and 30 per cent by private
food processing enterprises.
        Hungary's socialist-liberal government continues to open up the
market. Over the past one and a half years, state purchase prices
have increased and soft loans have been set up to stimulate
investment and exports. These steps have helped the agricultural
sector get out of a rut. Next year, this sector will receive more
production and exports subsidies (according to plans, approx. HUF 95-
96 billion). While in the early 1990s more was taken out of the
sector than allocated to it, in 1994 it was given HUF 2-3 billion
more than the amount it paid to the budget. This year's surplus is
expected to be much higher. Growing security of ownership and
production has increased investments (in 1994: HUF 31 billion; in
1995: far more at purchase value). There is a significant number of
Hungarian farmers who have enough capital for investment. According
to recent analyses, this year the agricultural sector will have
profit - more in stock breeding than in plant cultivation.
        Last year, agricultural exports totalled USD 2.2 billion. With
imports accounted, the net foreign currency income of the sector was
USD 1.2 billion. According to Ministry of Agriculture's forecasts,
the total reenue of the sector will be some USD 2.5-2.6 billion this
year, which means a net taking of USD 1.4-1.5 billion. (The
government's target figures for the turn of the century are USD 3
billion from agricultural exports and USD 2 billion net income.)
        This year's production value is some 2.5 per cent up on last
year. Of potatoes, 1 million tonnes will be harvested this year, of
sugar beet: 4.1-4.2 million tonnes, and of sunflower seeds: 0.7-0.8
million tonnes - all exceeding last year's yields. The green pea,
cabbage and oilseed rape crops will be also better than last year. Of
corn, 4.4-4.7 million tonnes have been produced, roughly the same as
last year. Of other cereals, 6.5 million tonnes have been harvested -
0.3 million tonnes less than last year. However, dry weather has
caused severe damage to apple orchards and vineyards. (The apple
harvest was 0.8 million tonnes in 1994, as against 0.4-0.5 million
tonnes this year. The 3.8 million hectolitres /83.6 million gallons/
of wine expected for this year will fall behind last year's
production by 0.7 million hectolitres.) Extreme weather conditions
have caused a total of HUF 40-50 billion losses to farmers.
        Analysts regard it as a sign of returning taste for farming
that the proportion of wheat, potato and sunflower seed fields has
considerably increased. The sowing area of cabbages has doubled.
These positive changes are partly due to increases in the state
purchase prices of potatoes and cabbages.
        Due to a twofold rise in the world market price of wheat,
Hungarian wheat exports may reach 1.5 million tonnes this year. To
prevent a shortage in domestic supplies and sharp rises in bread
prices, the Ministry of Agriculture will remove export subsidies and
on wheat export.

N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 204.                                             01. November 1995

Horn Gives Lecture in London

        London, October 31 - Joining the Euro-Atlantic organisations is
a fundamental Hungarian goal for economic, political, and security
reasons, Hungarian Prime Minister Gyula Horn said in a lecture at the
Royal Foreign Affairs Institute tonight. Horn, who arrived in the
British capital on a two-day working visit today, said Hungary was
making co-ordinated preparations in parallel for joining the European
Union (EU) and NATO even in the awareness that it would not
necessarily become a full member of the two European organisations
simultaneously.
        The Hungarian government, however, hopes that genuine talks on
joining the EU will start, at the latest, half a year after the 1996
inter-governmental conference on the future of the Union, he said.
        Horn explained, "Hungary+s desire to join NATO does not mean
that it feels threatened; it is rather based on common interests of
Euro-Atlantic values, European stability, and security."
        With the Cold War gone, new dangers have emerged, first of all
in Eastern and Central Europe. The example of Bosnia also shows
aggressive nationalism suppressing minority rights as the most
alarming trend, the prime minister continued.
        In Horn+s view, the all-European security system of the future
may be based on the following five pillars:
        - the enlarged Euro-Atlantic organisations,
        - the Organisation for Security and Cooperation in Europe,
which provides a framework for preventative diplomacy,
        - an institutional dialogue between NATO and non-NATO states,
        - regional and sub-regional cooperation, including the Visegrad
Group and the Alps-Adria work group,
        - bilateral agreements guaranteeing inviolability of borders of
Central European states and respect for minority rights.
        After the lecture, British Foreign Secretary Malcolm Rifkind
gave a gala dinner in honour of Horn.

Slovak Language Bill - Foreign Affairs Spokesman

        Budapest, October 31 - Although the Slovak language bill has
been refined a lot over the past few months, it still contains some
clauses which give cause for concern regarding the fate of the
Hungarian minority, Hungarian Foreign Affairs Spokesman Gabor
Szentivanyi told a news conference in Budapest today. Hungary would
like all the laws enacted in the meantime to be compatible with the
principles relating to minorities that are contained in the
Hungarian-Slovak basic treaty, he said.
        The spokesman expressed the hope that the treaty ratified by
the Hungarian Parliament would soon be ratified, as it was signed, by
the Slovak legislature.
        In reply to a question, Szentivanyi said Budapest has not set a
possibility of Prime Minister Gyula Horn meeting Slovak Premier
Vladimir Meciar at an international event in the near future.

EU Foreign Ministers's Tuesday Session - Kovacs

Luxembourg, October 31 - Countries nearby have been badly damaged by
the crisis in former Yugoslavia and the trade embargo imposed on
Serbia and Montenegro, and should get preference in rebuilding
contracts, said Hungarian Foreign Minister Laszlo Kovacs at a meeting
for foreign ministers of European Union member  ountries and
associate member states, in Luxembourg on Tuesday.
        In the official part of the six-monthly meeting of "the
Fifteens" and "the Nines", participants reviewed three themes: using
PHARE aid, tasks following finalisation of the peace agreement, and
the current standing of the peace process in the Middle East. Kovacs
underlined that centuries-old ethnic ratios of different
nationalities in Yugoslav regions should not be unbalanced. The issue
of human and minority rights should be resolved in lines with
European norms, fairly.
        Regarding reconstruction, Kovacs reiterated that Hungary has
indirectly suffered USD 2 billion lost trade from the crisis in
former Yugoslavia, mostly because of the economic embargo.

Horn Gives TV Press Conference

        Budapest, October 31 - The Hungarian government is aware of
public discontent and knows that hundreds of thousands of people are
forced to face very serious problems. However, it does not think that
the situation is "explosive". It is convinced that only consistently
implementing financial and economic stabilisation gives any chance of
improving the fate of individuals, Hungarian Prime Minister Gyula
Horn told a televised press conference today.
        Organised by the Hungarian Journalists+ Union, the press
conference was recorded this morning and broadcast tonight. It was
designed to be the first of a series of press conferences the prime
minister will give each month. At the conference were reporters from
68 Hungarian and eight foreign media. Reporters were free to ask any
question but they had to observe certain rules: for instance, no
question could take more than 45 seconds or contain an opinion.
        Horn said, "it is not because of the need to win the good will
of the IMF and the World Bank that Hungary should solve its financial
and economic problems. True, it is not the World Bank which needs our
assistance; the situation is just the contrary."
        "Our plans coincide with proposals of international financial
bodies. Hungary can only prosper if it expands its resources, firstly
with better economic performance." Horn added.

Parliament: Sub-Carpathian Hungarians, Slovak Language Bill

        Budapest, October 31 - Hungarians living in Sub-Carpathia
disagree over autonomy. Several of their organisations seem
discussion of the problem as untimely. The constitution of Ukraine
only supports cultural autonomy now, although the new Ukrainian
constitution, currently in the making, may allow extra, said State
Secretary of Foreign Affairs Istvan Szent-Ivanyi in response to MP
Sandor Kavassy (Hungarian Smallholders+ Party) at Parliament+s
Tuesday session. The Smallholder deputy had asked, "How does the
government wish to support the Beregovo Hungarians+ efforts for
autonomy, which were also backed by a referendum in 1991?"
        "The Hungarian government would like to help Sub-Carpathian
Hungarians in every possible way, and is steadily calling for the
extension of their rights," answered Szent-Ivanyi.
        After business, Tamas Sepsey (Hungarian Democratic Forum)
called MPs+ attention to points of the Slovak language bill which
discriminate against national minorities living in Slovakia. The
draft in several places contravenes the Slovak constitution and
several international agreements signed by Slovakia, he claimed.
        Sepsey stressed: Hungary must not give up efforts to keep good
relations with neighbours but there are some cases when it is
impossible to be any more accomodating.
        Gabor Gellert Kiss (Hungarian Socialist Party), chairman of
Parliament+s Minority, Religious, and Human Rights Committee, agreed
with Sepsey. At the same time he underlined the positive gesture of a
committee of the Slovak legislature offering to let Hungarian MPs
examine the language bill before it is put on the agenda.
        Szent-Ivanyi said the Hungarian government and the opposition
had basically identical views on cross-border Hungarians.

New Nonprofit Institutes for R+D

        Budapest, October 31.- The first Hungarian industrial research
institute set up in response to market conditions, on a German model,
opened in 1993. In September 1995, the third institute of this kind
was established in Budapest and a fourth will open in Debrecen,
eastern Hungary, next year. These new Hungarian institutes are named
after Zoltan Bay (research physicist, 1900-1903).
        Research and development in Hungary have been hindered in
recent years by economic recession. European countries spend an
average 1.5 per cent of GDP on innnovation. Before the deepening of
the recession, Hungary allocated major sums to research and
development (1985-1989: 1.8-2.1 per cent of GDP), but last year only
0.7 per cent was spent on it. This year the corresponding figure is
less than 0.5 per cent and, next year, according to the draft 1996
budget, it will be less than 0.4 per cent of GDP.
        The innnovation expenditure of companies has plunged to one-
tenth of that before 1989, dropping especially fast in the last two
years. Since 1993, less than 50 per cent of industrial technological
companies have been investing in development.
        Due to waning government and company support, the establishment
of the Bay network is increasingly important for Hungary. These
institutes - like the Finnish, Dutch and Austrian networks - were set
up based on the model for an industrial development institute
operated by the German Frauenhofer Gesellschaft. As the first country
to adopt this model in Central Europe, Hungary has set an example to
the other signatories of the Central European Free Trade Agreement:
The Czech Republic, Poland, Slovakia and Slovenia.
        The Bay institutes offer a way to carry out the transition from
a centrally-subsidized model to a market-oriented one. These
institutes are nonprofit organizations. They are not subsidized by
the state but on occasion may receive one-off support for their
projects through tenders. The capital stock of the Zoltan Bay
Foundation has been provided by banks and a state foundation.
        Similar foreign institutes cover most of their costs by working
for firms. The Hungarian Bay network meets only 40 per cent of its
costs (totalling HUF 150-200 million, or approx. USD 1.2-1.5 million)
from this source - the rest is provided through tenders and from
interest on the foundation"s capital. The management of the
foundation aims to increase the proportion covered by industrial
orders to 70 per cent by 1988.
        The Bay institutes are in close contact with institutions of
higher education. The government resolution supporting the
establishment of the network (passed in October 1992) stipulated that
such institutes can be set up only if there is a suitable staff and
quipment.
        The first Bay institute began operating in Miskolc (NE Hungary)
in 1993. Based on the town"s university and heavy industry, the
institute specialized in logistic and production technology
development. The next Bay institute opened in Szeged (south), and
specialized in applied biology with the help of the local university
and academy. This autumn, a third institute was opened in Budapest,
which deals with materials technology with support from the Budapest
Technical University. The next institute will be set up in Debrecen
east) in 1996, and its speciality will be the development of medical
equipment, with a favourable environment provided by the medical
university and the town"s pharmaceutical company. In 1997 and 1998,
two Bay institutes will be established in western Hungary. The
institute in Keszthely, near Lake Balaton, will carry out
agricultural projects, and the one in Gyor, beside the Danube, will
specialize in machine construction.
        In the three institutes already operating, 50 projects are
under way with the assistance of 100 full-time and 500 outside
researchers, mainly university scientists. Cooperation with
universities has resulted in major reductions in costs and the
successful completion of several projects. Many university students
and candidates for doctor"s degrees have received scholarships from
the foundation. The Bay institutes have also helped in the evolution
of a new attitude to scientific research in Hungary by teaching those
working for them to satisfy the economic requirements of their work.
        The international recognition of the institute"s work is
apparent from the fact that more and more projects are carried out in
cooperation with Finnish, Dutch and Austrian partners: there are 15-
20 joint research programmes going on at present.

N E W S L E T T E R

from the Daily Bulletin of the Hungarian News Agency MTI
distributed by the Department for Press and International Information
Ministry of Foreign Affairs, Republic of Hungary

H-1394, Budapest P.O.B. 423.
Telephone: 36 (1) 156-8000
Telefax: 36 (1) 156-3801
No. 205.                                                02. November 1995


Laszlo Kovacs on Hungary's Foreign Policy

        Budapest, November 1 - The government's foreign policy has the
same three priorities as those worded by the previous government in
the spring of 1990 - in line with Hungary's potential, interests and
international politics. These are: preparing for integration into
mainstream Europe and NATO, striving for balanced relations with the
neighbouring countries, and representing the interests of cross-
border Hungarians, said Hungarian Foreign Minister Laszlo Kovacs at
today's session of Parliament's Committee on European Integration
Affairs, when summing up the foreign department' recent work.
        As regards Hungary's relationship with NATO, Kovacs said
Budapest had notified the organization that during the final
settlement of the conflict in former Yugoslavia international forces
may assemble on the territory of Hungary. When this issue becomes
timely, the Hungarian government will naturally ask for approval from
Parliament, he added.
        The settling of the crisis in former Yugoslavia was also
discussed by the foreign ministers of the European Union's full and
associate member states at their October 31 meeting. Kovacs said he
had mentioned at the session the problem of Serb refugees settled in
Vojvodina, stating the view that any kind of ethnic cleansing or
changes in the long-set ratio of nationalities could become a hotbed
of political tensions.
        Minority rights should be granted to refugees returning to
their homeland in former Yugoslavia - on the grounds of the European
norms, at every place and for each nationality, said the foreign
minister.
        The foreign minister also spoke about Romanian President Ion
Iliescu's initiative for historic reconciliation between Romania and
Hungary. The Hungarian government is a partner in this but it regards
reconciliation as a process which includes the settling of all
debated issues, or the granting of guarantees for this, respectively.
Several issues, for instance the minority problem, can be settled
only through legal channels, not by a code of political conduct, he
said.
        Slovakia still has not ratified its basic treaty with Hungary.
Nevertheless, in Kovacs's view there are several possibilities for
advance in the two countries' relations.

Hungarian Prime Minister Briefs Journalists in London

        London, November 1 - "It is not NATO that wants to expand its
borders towards the East, rather the new democracies are aspiring to
join the Atlantic alliance. Now that the Eastern European states have
actually fulfilled the basic requirements for membership, or at least
are on their way to fulfilling them, there is no political or moral
reason on the basis of which their application could be turned down
by the organization," Hungarian Prime Minister Gyula Horn told
journalists in London on Wednesday evening.
        In summing up his talks in Britain, Horn said he had stressed
that in Hungary's view Moscow had no right for veto or even for
interference in the issue of expansion.
        The West attributes much more significance to consultations
with Russia than many would imagine. The British negotiating partners
pronouncedly recommended that Hungary should have a dialogue with the
Russians in order to dispel their worries, said the Hungarian
premier.
        Horn's one-day visit to London focussed on seeking British
support to Hungary's claim for European Union (EU) membership. It is
very important for Hungary that the British cabinet and Prime
Minister John Major himself support that the date for launching
admission talks should be decided at the EU's inter-governmental
conference, said Horn.
        The Hungarian premier's talks also touched on the crisis in
former Yugoslavia. The two sides agreed that there had never been
such a great chance for peace and that peace can be only based on a
comprehensive settlement.
        Horn said his trip to London had been part of a series of
negotiations aimed at convincing the EU's full member states that the
admission of the Eastern European candidates would be just as
beneficial for the union as for these countries.
        The Hungarian head of government left London on Wednesday
evening.
British FM Rifkind Meets Hungarian Reporters

        London, November 1 - "The British government is convinced that
Europe has renewed and this new Europe has the duty to lend a helping
hand to the East," Malcolm Rifkind said late on Tuesday.
        The British foreign secretary spoke to Hungarian journalists on
the occasion of the gala dinner he hosted in honour of Hungarian
Prime Minister Gyula Horn. He said Hungary is a part of Europe, and
as such it should itself look forward to its accession to European
institutions.
        According to Rifkind, the European Union will be able to
welcome Hungary and other states in the region among its members "in
the not too distant future". The principle of NATO expansion has also
been "widely accepted", and work along this line is gradually
changing the enlargement of the Atlantic alliance "from mere
possibility into reality", he added.
        The foreign secretary said the British government deems it
desirable to begin negotiations on EU admissions as soon as possible.
        Horn said in his lecture at London's Royal Foreign Affairs
Institute on Tuesday evening that he would like to see admission
talks could start six months after the inter-governmental conference
deciding the further time-table of EU integration, but not later than
the first half of 1998.
        The Hungarian prime minister believed the EU should invite the
four Visegrad countries (the Czech Republic, Hungary, Poland and
Slovakia) to the conference table at the same time, but from then on
differentiation should be made. "Why should steadily progressing
countries have to wait for others, who do not proceed so fast on the
road of reforms? he asked.
        Horn, on a two-day visit in London since Tuesday, will confer
today with the president of the London-based European Bank for
Reconstruction and Development, and will then be received by his
host, Prime Minister John Major. He will also meet Labour Party
leader Tony Blair, head of the opposition, Chancellor of the
Exchequer Kenneth Clarke and Secretary of State for Trade and
Industry Ian Lang. After finishing his programme in London, Horn will
return to Budapest on Wednesday afternoon.


EBRD to Take Greater Role in Hungarian Projects

        Budapest, November 1 - The London-based European Bank for
Reconstruction and Development (EBRD) has so far decided to.finance
39 projects in Hungary to an aggregate value of about ECU 1.1
billion. By September 1995, ECU 700 million worth of contracts have
been concluded and ECU 365 million disbursed. The disbursement of
further tranches depends on progress in privatization and the
realization of the ongoing transport and agricultural projects.
        The most ambitious project, worth ECU 60 million, envisages the
modernization of mass transport in Budapest, including the
reconstruction of underground lines, construction of tram lines and
the replacement of outdated buses by environmentally sound ones. The
biggest item of the project, the reconstruction of the oldest, 100-
year-old, underground line, was completed in September.
        Over the past few years, the EBRD has contributed over ECU 21
million to the construction of the MO motorway around Budapest. The
bank has granted ECU 120 million for the building of a 28-mile (45-
km) section of the Budapest-Vienna motorway (M1) between Gyor and the
Austrian border, and the construction and modernization of the M5
motorway, to connect Budapest with the Serbian border. The M1 project
to be completed by the end of this year is a kind of experiment for
the EBRD, because this will be Hungary's first toll-road constructed
under a concession. The motorway is being built by the concessionaire
who will later operate it. Satisfied with the course of cooperation,
the EBRD has indicated its willingness to finance the construction of
further motorways under concession.
        The bank has granted an ECU 300 million loan for the expansion
and modernization of Hungary's telephone network, including the
establishment of nine regional exchanges by the Hungarian
Telecommunication Company MATAV.
        This summer the EBRD announced that it was ready to co-finance
the privatization of public utilities in Hungary, including the
electric energy industry, and the gas and oil suppliers. The bank's
experts stressed that the energy sector should first be transformed
so that its units should sell well. Once privatized, the technology
of energy suppliers can be modernized from EBRD funds.
        The EBRD has taken an important part in the updating of
Hungary's financial infrastructure. (Inter-bank computer links and
the standard western money-market techniques, including sophisticated
loan schemes, were missing even in the early 1990s.) The past few
years have seen major progress in these fields. The EBRD is now
working out an agreement, under which it would finance export-credit
guarantees to be issued by the Hungarian Foreign Trade Bank.
        The bank has provided ECU 115 million worth of loans to
Hungarian farms. To date, it has acquired assets in a single
Hungarian company, EGIS Pharmaceuticals Rt. The bank is looking for
trade investors who could bolster the competitiveness of the company.
The EBRD has indicated its interest in the purchase of company stakes
in the Hungarian chemical and vehicle industry but has not yet named
any particular company.


OMRI DAILY DIGEST
No. 216, 6 November 1995

CONTINUED CONTROVERSY OVER SLOVAK LANGUAGE LAW. Representatives of
Slovakia's Hungarian coalition, returning from Strasbourg on 3 November,
said the Council of Europe has promised to discuss the state language
bill with Slovak representatives, Sme reported. The Hungarians have
claimed the draft law is unconstitutional and violates international
norms and the Slovak-Hungarian treaty. Pal Csaky of the Hungarian
Christian Democratic Movement said that if the parliament passes the
bill, the Hungarians will bring the case to the European Court of Human
Rights in Strasbourg. Meanwhile, the Permanent Conference of the Civic
Institute criticized the other opposition parties for not taking a stand
against the bill, which "will damage the culture of entire Slovak
society, not just the Hungarian minority," Pravda reported. Deputy
Premier Katarina Tothova on 3 November argued that the bill is in line
with the constitution and international conventions signed by Slovakia.
"Slovakia is a sovereign state that has the full right to pass
legislation on the state language," Tothova said. -- Sharon Fisher

HUNGARY, ROMANIA REOPEN TREATY TALKS. Hungarian Foreign Ministry State
Secretary Ferenc Somogyi and his Romanian counterpart, Marcel Dinu, on 3
November resumed talks aimed at settling sensitive ethnic minority
issues and restarting treaty negotiations. The talks were the first
since negotiations on the Hungarian-Romanian treaty were suspended in
July. The two officials stressed that the negotiations were preliminary
and aimed at clarifying Romanian proposals made in September, including
a joint political declaration and a "code of conduct" on cooperation in
the field of national minorities. Talks on the final texts of the joint
agreements are expected to start early next year, after Hungary makes
its own proposals, Dinu said. -- Zsofia Szilagyi

HUNGARIAN WORKERS DEMAND WAGE HIKES. Following warning strikes in the
energy sector last week, health workers have scheduled a one-day strike
for 11 November to demand higher wages, Hungarian media reported. The
police plans a national demonstration on 2 December to press their
demands for wage hikes. Magyar Hirlap reported that three unions--
representing teachers, public library employees, and university
professors--set up a joint strike committee on 5 November demanding a
25% increase. They say that if the government does not name a
negotiating team within five days, they will stage a nationwide strike.
Finance Minister Lajos Bokros said the government cannot yield to
demands for wage hikes. If it were to do so, it would have to give up
plans to reduce real wages and would be effectively saying the rigorous
stabilization program is unnecessary. -- Zsofia Szilagyi

[As of 12:00 CET]

Compiled by Jan Cleave


Monday, 6 November1995
Volume 2, Issue 215


REGIONAL NEWS
-------------

        **REGIONAL LEADERS TO ATTEND FUNERAL**
        Czech Prime Minister Vaclav Klaus will attend the funeral of
        assassinated Israeli Prime Minister Yitzhak Rabin today.
        Klaus said in a statement "I firmly believe that the criminal
        act aimed at disrupting the ongoing process of peace
        settlement will only instigate a determined action to
        implement the existing agreements and make new ones."
        Hungarian Foreign Minister Laszlo Kovacs has cancelled an
        official two-day visit to Israel because of Rabin's
        assassination.  But Kovacs will still go to Israel to attend
        Rabin's funeral.  Polish Foreign Minister Wladyslaw
        Bartoszewski, an honorary citizen of Israel, said yesterday
        that  Prime Minister Rabin's "martyr's death" will lay a
        cornerstone for Middle East peace.  President Walesa expressed
        grief and shock at the murder of his fellow Nobel Peace
        Prize-winner.  The government press office says Prime Minister
        Jozef Oleksy will represent Poland at Rabin's funeral.
        Romania yesterday expressed dismay at the Rabin's
        assassination and said it would continue to back Middle East
        peace efforts.  Romania, a friend of both Israel and the Arab
        world, has always tried to mediate peace talks in the Middle
        East.

        **THE FATE OF SLAVONIA**
        There are going to be more talks on the fate of Croatia's
        eastern Slavonia region.  An intial effort by the U.S.
        ambassador to Zagreb, Peter Galbraith and U.N. envoy Thorvald
        Stoltenberg to get the Serb and Croatian sides together fell
        apart Saturday when the Serbs didn't show up.  Croatian
        President Franjo Tudjman said Saturday the U.N. peacekeeping
        mandate on Croatian territory won't be renewed at the end of
        this month. Tudjman says there has to be an agreement on the
        return of eastern Slavonia to Croatia by then to avoid war.
        Croatia and the Serbs have agreed in principle the territory
        should belong to Croatia. But sources close to the
        negotiations say they disagree over the length of an
        internationally-supervised transition.   Zagreb is offering
        one year while the Serbs want three.  Eastern Slovonia borders
        Serbia and Hungary.



BUSINESS NEWS
-------------

        **PROFITABLE COMPANIES CAN PAY WORKERS MORE**
        Hungary's government announced yesterday that it's going to
        raise the limit on current pay raises for profitable
        state-owned companies to 21 percent from 15 percent in certain
        cases.  Government spokesman Elemer Kiss says the higher limit
        will apply to state companies with higher-than-average profits
        for their sectors as a result of increased productivity.
        Profits from price increases won't count.  The move comes a
        week after workers at Hungary's only nuclear power plant at
        Paks struck for two hours to reinforce their demand for a 25
        percent pay hike.   But the new measure, won't apply to
        workers in the electricity industry as a whole.  That's
        because most of them work for loss-making units.

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